Thinking of refinancing? Ten questions to ask first

Start with your goal

People refinance to change their payment, to shorten or lengthen the loan, to move from an adjustable to a fixed rate, or to pull out cash. Each goal points to a different answer, so decide yours before you compare offers.

Questions worth asking

• What will the refinance cost in total, and how long until I have recouped those costs?
• How long do I plan to stay in this home?
• Will I be restarting the loan term, and what does that do to the total I pay over time?
• Will my new loan include escrow, and how will that change my monthly costs?
• Does my current loan have a prepayment penalty?
• Is a cash-out refinance or a second mortgage the better fit for what I need?
• What documents will I need to provide?
• How long will the process take?
• What does my appraisal need to support?
• Who will be my point of contact until closing?

Run the comparison on paper

Ask for a written Loan Estimate and compare it with your current loan. Include closing costs and the time you expect to keep the home. A licensed originator can help you run it. There is no obligation to ask.